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The Trade Union Law came into force on 1 February 2008, supplementing a Labour Law passed in 2006. But despite these new laws, there was little change for workers in Laos, one of the few remaining nominally communist states in the world. The only trade union organisation in the country is closely linked to Lao People's Revolutionary Party (LPRP), the sole legal political party in the country. Work stoppages and strikes are forbidden in law, and there were no reports of labour unrest during the year. A systematic lack of enforcement of the labour law leaves Lao workers unable to realise their rights in practice.

Trade union rights in law

No freedom of association: The Constitution of Laos provides that Lao citizens have the right and freedom of speech, press and assembly, and have the right to set up associations and to stage demonstrations which are not contrary to the laws (which makes independent trade unions unconstitutional).

Trade union pluralism does not exist in Laos. The Trade Union Law of 2008 defines "Lao Trade Unions" as a "mass organisation in the political system of the democratic centralism unified leadership under the Lao People's Revolution Party." Labour unions must be affiliated with the government sanctioned Lao Federation of Trade Unions (LFTU), which operates as a mass organisation directly controlled by the LPRP. Article 5 of the Trade Union Law explicitly states that the trade union must "organise and conduct its activities in line with the ... unified leadership under the Lao Revolution Party." The Constitution says that the LFTU's role is "to unite and mobilise all ... people for taking part in the tasks of national defence and construction."

The Trade Union Law defines membership of the trade union as workers from various sectors who have been "registered as members of trade unions in the Party's and State's organs, the Lao Front for National Construction, mass organisations and labour units". Civil servants employed in state administrative organs and employees in state enterprises still constitute the overwhelming majority of the LFTU's members.

Article 5 of the Labour Law of 2006 requires that "trade unions shall be established in each labour unit" and at those workplaces where a union is not formed, there shall be a "workers' representative." The law is silent on how "workers' representatives" will be selected. However, in the past, representatives of the Ministry of Labour and Social Welfare (MOLSW) have acknowledged to the National Assembly that there is no punishment under law for employers who fail to comply with this requirement.

The Trade Union Law defines the status, rights and obligations, as well as the system, structure and financial management of trade unions at all levels, thus failing to accord workers the right to determine the structure, rules, administration or activities of their organisations.

Article 30 of the Trade Union Law prohibits union members from organising an "illegal group, gathering, or protest and acts" that are found to damage not only the union but also the interests of the State or the collective interest.

Legal authority for unions to bargain but no requirement to compel employers to negotiate: Both the Labour Law and the Trade Union Law recognise the role of trade unions to negotiate with employers over wages and conditions of work. Article 11 of the Trade Union Law explicitly states that unions are to represent workers in signing collective contracts, and can request employers to revise or end unfair labour contracts.

But within the wide array of issues covered by the Labour Law, the role of trade unions is acknowledged only in the context of identification of workers for redundancy, the possibility to negotiate on wage levels and to assist individual workers in the settlement of labour disputes over rights. The Labour Law does not compel an employer to negotiate on any issue with a trade union and does not recognise any form of collective labour dispute.

Part IX of the law deals with the settlement of disputes. Article 44 defines the role of the union as promoting mediation and resolution rather than the defence and furtherance of the rights and entitlements of workers.

Strikes effectively outlawed by law: The Labour Law strictly prohibits workers or their representatives from calling a work stoppage in a wide variety of situations. Neither workers and their representatives, nor employers, can call for a work stoppage in cases of disputes regarding implementation of the labour law or regulations, or a dispute over workers benefits under the law. Work stoppages are also forbidden if the matter is the subject of negotiations in which both sides have agreed to participate, or while the dispute is under consideration by the labour authorities, or in the labour disputes settlement procedure of the People's Court. Persons or organisations involved either "directly or indirectly" in a stoppage, or who "verbally or materially incites workers" to conduct a stoppage "thus causing damage ... or social disorder" are punishable under law.

The dispute resolution system set out in the Labour Law fails to provide any avenue for a legal strike to be called. Articles 62 and 63 of the law set out that "disputes over rights" [involving complaints about failure to follow the Labour Law, internal work rules, signed contracts and other legal instruments] must be resolved through negotiations, government-directed mediation, and finally, as a last step, referral to the People's Court for a decision. Article 64 requires that "disputes over interests" [involving claims for benefits and rights above what the law provides] must be settled by negotiations, then referral to the Labour Dispute Arbitration Committee, and finally by decision in the People's Court.

The right to strike is further restricted by dissuasive penalties. The penal code provides for between one and five years' imprisonment for those who join an organisation that encourages protests, demonstrations and other actions that might cause "turmoil or social instability."

Election of union leaders, but restrictions on their removal: Article 13 of the Trade Union Law requires that the leaders be elected by the members in union's general meetings. However, Article 32 of the same law sets out a broad restriction that prohibits any organisation or individual from seeking to dismiss members of the trade union executive committee at any level without the prior consent of the leaders at the higher level of the union.

Exclusion of government and mass organisation staff from Labour Law: Civil servants in "state administrative and technical services, national defence, public order, and mass organisations" are excluded from the remit of the Labour Law.

Legal protection against termination for union activities: According to Article 30 of the Labour Law, employers may not fire employees "who are preparing to be on the trade union committee or a workers' representative to be approved by the workers." The same Article makes it unlawful to terminate an employee for filing a complaint against the employer, engaging with officials seeking to apply the labour law, or being involved in a labour dispute at the worksite. Article 31 of the Trade Union Law prohibits employers from dismissing any member of the trade union "without reasons and improperly by the law."

However, protections against retaliation short of termination are lacking. For example, Article 34 of the Labour Law allows an employer to transfer workers for "disciplinary reasons" or "as a means of preventing possible damage to its activities."

Union membership subject to nationality and age restrictions: Article 20 of the Trade Union Law restricts trade union membership to those having Lao nationality. Children as young as 14 years old are permitted to legally work, but the same section of the law also sets an age requirement that workers must be over 18 years old to join a union.

Trade union rights in practice and violations in 2008

Workers quiescent, media controlled: During the year, there were no reports of labour protests or unrest reported in the Lao media, which is controlled by the government. Most observers note that Lao workers are largely quiescent and have little knowledge of their rights.

Union and party hand in glove: Given the fact that the LFTU and LPRP are so closely knit, the LFTU effectively operates as a labour front for the ruling party. Indeed, the President and two Vice Presidents of the LFTU are accorded status equal to a Minister and vice Ministers in the government, and the LFTU presidium and top officers are all paid salaries by the government. In public statements, the LFTU frequently speaks of its role as a collaborator with government in ensuring enforcement of the Labour Law so that the rights of both workers and employers are protected and as a formulator of future labour laws. The LFTU's quasi-state function means it exists in a dual role as both as a controller as well as a potential protector of labour.

Factory level LFTU representatives are usually LPRP members and/or part of the management of state-run or private sector companies. There is little evidence that the union is able to effectively protect workers' rights, especially in private sector companies to which the LFTU Labour Protection Department has admitted having limited access to workers.

No effective collective bargaining: The government unilaterally sets wages for government employees, and this determination is not subject to collective bargaining. For private sector employees, the Labour Law gives unions the right to negotiate pay levels with the employer. However, there is no provision in the labour law that compels an employer to bargain or penalises the failure of an employer to bargain.

Lack of law enforcement: Observers from international NGOs and embassies based in Vientiane indicate that non-enforcement of the labour law by the MOLSW, particularly in dealings with joint ventures in the private sector, is the norm. There are no Labour Courts, and all 450 judges in the country are LPRP members.

The Trade Union Law provides the authority to unions at each level to set up "inspection committees" composed of the President, Vice President and other union leaders. The functions of these committees include monitoring and oversight of labour that may ultimately supplement state inspection roles, but there was little to indicate that the committees were functioning effectively during the year.

LFTU seeks to expand level of engagement and role: The LFTU hosted its first ever workshop with representatives of Global Union Federations and Solidarity Support Organisations on 12-13 May in Vientiane and outlined plans to play a larger role in myriad labour matters in the future. Capacity building programs, particularly on occupational safety and health issues, were conducted by the LFTU with the assistance of international partners.